A nonutility unit of New Hampshire-based energy holding company Unitil Corp. has created a statewide natural gas and power-buying group with the state's 10 counties to get them discounts on their ongoing energy bills. The deal involves Unitil's Usource unit and the New Hampshire Association of Counties.
Under the agreement, Usource will apply transaction and market-monitoring services, along with energy market experience as leverage for the state's counties in obtaining gas and electricity supplies on a aggregated wholesale basis.
Usource says it is the nation's second largest broker of gas and electricity, operating in 18 states and managing more than $500 million in energy contracts. It is closely watching the Marcellus Shale, said Usource Business Development Director Bill Kibler, who spoke with NGI Thursday.
While noting that much infrastructure still needs to be built to tap the Marcellus, Kibler said he is excited about the potential and described it as "certainly one of the supplies we are watching." He said so far the shale play is one of the factors "buffering prices," although he has seen some "uptakes in the basis" just recently that he feels are indicative of the lack of pipe in the ground to fully take advantage of the new supplies.
Kibler said that so far National Fuel Gas Corp., one of Usource's suppliers, is the only gas distributor with the infrastructure to take advantage of the shale gas boom. "Everyone else is trying to get up to speed," he said.
In the New Hampshire buying arrangement, Kibler said that savings of up to 9% or more "are estimated for all counties as part of our agreement." He added that current competitive electric and natural gas markets "continue to see prices at five-year lows."
Usource is working with a number of companies that are seeking long-range deals involving Marcellus supplies, Kibler said. He predicts that the changes in the market now taking place are precedent setting. Historically gas supplies have flowed south-to-north for the Northeast region, and now the prospects and preparedness is all for a north-to-south flows, Kibler said.
"New York and Pennsylvania are pretty excited about the prospects. Their industries have been down for a long time, so this is definitely a potential economic boom for them," he said.
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